What does a mortgage broker do?
Sometimes there’s some confusion about what a mortgage broker does, why you would use
one, and if you have to pay for it. A mortgage broker is the liaison between you and the lender, whether it be a bank, credit union or other mortgage provider. A broker can access a large number of different mortgages and can help shop around to help you get the best rate.
I’ve heard people say before, “an internet comparison site can do that, so why would I use a broker?” An internet comparison site can compare rates, but they generally can’t compare other things. And here’s a few other important things that can might be relevant when finding a mortgage:
- If you’re self-employed it can be harder to prove reliable income. Some banks may be more ‘friendly’ towards the self-employed than others.
- You might need your new mortgage to be flexible in order to allow refinance in the near term, there can be fees that apply and they may vary amongst mortgages.
- You might have a limited amount set aside for a deposit. Different mortgage providers have different requirements for lower deposit loans.
- A mortgage broker can check if you are likely to be approved for the loan or not BEFORE actually applying for the mortgage. This can save you from having a ‘decline’ on your credit record.
- Structuring your mortgages. If you are taking out a second mortgage care needs to be given as to how they are structured. A mortgage broker can help you understand this.
A good mortgage broker will shop around not only for a competitive interest rate but also for a mortgage that will suit your circumstances in other ways. And if you’re a first home buyer the process can be daunting – a good mortgage broker will guide you through and educate you along the way.
So, do I do mortgages? No, as a financial adviser that’s not one of the areas that I cover. But if you need help with this I do suggest you speak with a mortgage broker about your situation.
Alison Kaigan – Your Canberra Financial Adviser